Oregon lawmakers eye Energy Trust's fat bankbook

While lawmakers slash school budgets and freeze salaries, the state-created Energy Trust of Oregon is handing out tens of millions of dollars to big companies for conservation projects and bumping up pay and benefits for its staff.

Such disparity has prompted a hard look at the organization by legislators who want more oversight of the nonprofit group and look to tap its rapidly growing bank account.

One plan: Shift most of the money to deteriorating schools rather than the likes of Intel and Fred Meyer, which have received generous cash grants from the Energy Trust.

"I've got parents in here crying because their kids are being shut out of schools," says Sen. Larry George, R-Sherwood, who wants to change the way the trust's money is distributed. He says he's bothered by the largesse going to replace lights at supermarkets at the same time many of Oregon's schools are crumbling.

"If the public knew what was going on, they'd be outraged," George says.

He has teamed with Sen. Betsy Johnson, D-Scappoose, on a bill that would shift about $100 million of the Energy Trust's $130 million budget to pay for upgrades to schools and other public buildings, with schools getting the biggest share.

Energy Trust supporters say the group is simply carrying out the will of the Legislature, which approved a 3 percent tax on utilities in 1999 to pay for energy efficiency improvements and renewable energy projects. That led to the formation of the Energy Trust in 2002, and trust officials say their conservation efforts have saved enough energy to power 232,000 homes.

"It doesn't make much sense to us to upend a system that's been working well for seven years," says Jeff Bissonnette, a lobbyist for the Citizens' Utility Board.

The debate reflects rising tensions in Salem. Gov. Ted Kulongoski and other Democratic leaders are pushing hard to advance green energy and technology while also dealing with the worst economic bust in decades. That has set up a broader argument over Oregon's spending choices in a time of fiscal crisis.

The Energy Trust

• What it is: Homeowners and businesses pay a 3 percent fee on their utility bills.

• Where the money goes: Most goes to the Energy Trust, which projects $120 million in "public purpose" revenue in 2009-11, up from $30 million when it started in 2002-03. The increase is due to rising power rates.

• Who gets it: This year, $58.5 million goes to commercial and industrial projects, $39.3 million for residential, and $22.2 million for renewable energy. The spending includes carryover and other revenue sources. Among those that have received grants: Fred Meyer, $843,000; Weyerhaeuser, $399,000; Smith Frozen Foods (owned by former U.S. Sen. Gordon Smith), $12,000.

Dipping into other budgets to keep state programs solvent has become a popular strategy this year, as legislators battle budget deficits that are among the biggest they've ever seen. To balance the current budget, which was $855 million short, they took money from the Oregon Cultural Trust, the 9-1-1 emergency fund and liquor sales agents, among others.

The Energy Trust has been in the Legislature's cross hairs before, although on a much smaller scale. Two years ago, lawmakers voted to tap its fund for $4.6 million to help pay off a debt owed by the Oregon Museum of Science and Industry. Kulongoski used one of his rare vetoes to quash that attempt.

In some ways, the Energy Trust presents an easy target. Its 60 employees occupy a plush suite of offices offering stunning views of downtown Portland. Executive Director Margie Harris recently got a 13 percent raise, for an annual salary of $151,039 plus $8,300 a year in deferred compensation.

That comes on the heels of a 7 percent pay increase for Harris last year and a 35 percent hike in her benefits. At least four other Energy Trust employees make more than $100,000 a year. And at a time when many government agencies -- and private employers -- are laying off or cutting back on staff, the board last December authorized the Energy Trust to hire four more employees.

Although the Public Utility Commission looks over the organization's books, it doesn't oversee management. The board is self-appointing, with no input from the governor or the Legislature.

Energy Trust spokeswoman Amber Cole is quick to point out that overall administrative costs represent only 5 percent of the trust's budget -- less than half of the 11 percent allowed by the PUC.

"We look for efficient ways to do the work we do," Cole said.

She said the money allocated by the Energy Trust has helped Oregon avoid building expensive new power plants and burning more fossil fuel.

Among the services offered by the trust are energy audits, in which homeowners learn the most cost-effective way to save energy -- and often receive financial help to make the improvements. The trust also helps pay for bigger industrial and commercial projects, including a solar energy system for the Portland Habilitation Center and a co-generation plant at a southern Oregon lumber mill.

The explosive growth of the Energy Trust has thrust it into a political spotlight in a year when legislators are considering billions of dollars in tax and fee increases to pay for state programs. Sen. Rick Metsger, D-Welches, said the conservation effort was never envisioned to be as big as it has become.

"We thought they might have a $10 million or $12 million budget," said Metsger, who worked on the original bill that added the 3 percent utility tax.

Board members aren't covered by the same public disclosure requirements as other elected or appointed officials, and Metsger is sponsoring a bill that would require Energy Trust board members to do so.

On Friday, Metsger got into an argument with Bissonnette, who defended the Energy Trust at a hearing in Salem. Bissonnette contended it is funded by a utility charge, not a general tax, which means the money it spends is not public money. "It's ratepayer money," Bissonnette said.

The Legislature ordered the "public purpose charge," countered Metsger, "therefore it is a tax."

Cole, the Energy Trust spokeswoman, said because of the nonprofit nature of the group, employees cannot comment on legislation.

Kulongoski will oppose any effort to divert money from the Energy Trust's main mission, said spokeswoman Anna Richter Taylor. "He has opposed prior attempts to gut the program and will do so again," Richter Taylor said. "Everything he's working on is raising up our energy efficiency programs, not dismembering them."

George argues that no organization with state ties should be immune from the cuts that are occurring throughout state government. Besides, he says, the state still offers generous tax breaks for energy conservation projects, and many companies take advantage of both the tax credits and grants from the Energy Trust.

"We're not talking about doing away with conservation," George says. "We're talking about prioritizing schools."